Seychelles - Economy

Seychelles possesses a thriving economy, but external debt holds back
real economic development. Agriculture, fishing, and forestry accounted
for about 4% of GDP in 1999. Crop production is limited by mountainous
terrain and low soil fertility leaving the Seychelles dependent on
imports for beef, rice, potatoes, and some fresh produce. The
manufacturing sector accounts for 26% of GDP. Since the opening of the
international airport in 1971, the Seychelles economy became dependent
on tourism. In 1999, tourism employed 30% of the labor force, and
provided the majority of foreign exchange earnings, but in 2000,
industrial fishing surpassed tourism as the most important source of
foreign exchange. Stiff international competition for tourist dollars
caused the government to take steps to broaden the economic base by
promoting the development of fishing and light manufacturing. The
tourism industry was adversely affected by the 11 September 2001
terrorist attacks on the United States and the subsequent decline in air
travel. Tuna fishing and canning accounted for 70% of GDP in 2003.

Although private enterprise and private property are permitted, the
public sector drives the economy and accounts for more than 40% of GDP.
The government controls the importation, licensing, and distribution of
virtually all goods and services, and exercises significant control over
all phases of the economy. Since 1990, a program to privatize the
economy has resulted in progress in several sectors including tourism,
fish processing, and agriculture. In 1995, the American food company
Heinz and Co. purchased 60% of the previously state-owned Seychelles
Tuna Canning Factory, and the joint venture between the government and
Heinz is now the single largest employer in the Seychelles. In addition,
most state-owned agricultural land has been turned over to private
control. The government is attempting to develop an offshore and free
trade zone to further develop the economy and move it away from its
dependence upon tourism and fishing.